PEO Insider Issue

PEO Confab

The old adage, “The more things change, the more they remain the same,” seems paradoxical, but examples are all around us. Each day is different, but the sun still rises just the same. Old songs, movies, and TV shows are remade, but each new audience sees them as new. No two PEOs are the same, but they all face the same challenges.

Speaking of PEOs, one might reverse the old adage to read, “The more things remain the same, the more they change.” PEOs live in a paradox: Their success depends on them performing exacting tasks consistently and correctly as everything changes around them. PEOs have adapted to constant change since the beginning.

PEO Insider got together with four PEO executives in September during NAPEO’s 2017 Annual Conference & Marketplace, and their discussion shows this clearly. Three of the participants have been in the industry for decades, and one for only a few years. Today’s start-up PEO’s challenges are not that different from those experienced in the early days: setting up infrastructure, getting benefits programs in place, and hiring qualified staff. However, technology is vastly different, rules governing benefits plans are certainly different, and lessons have been learned about finding and developing PEO talent.

To read the transcript of their discussion presented in this feature is to observe the similarities and differences in each person’s story, to note the ways the industry has evolved with the changing climate in order to succeed in its mission, and to admire the people who live and work in this paradoxical business.

Departments

Risk Management

What a time to be a PEO. The economy and stock market are performing well and the industry is continuing to grow year after year. I think we can all agree that growth is good. Like all good things, however, growth brings challenges. The numbers get bigger. The clients get bigger. The risk gets bigger. As the risks get bigger, we must do more and more to manage them. Managing financial risk is one of the most important responsibilities of any company, and arguably the most important thing for a PEO. In today’s world, companies of all sizes are looking to develop robust financial risk management frameworks that adhere to compliance demands, contribute to better decision-making, and enhance performance. Two areas of interest seem to be loss-sensitive insurance programs and financial reporting and cash flow management.

Finance & Accounting

NAPEO’s Financial Ratio and Operating Statistics Survey (FROS) is one of the many valuable benefits of being a NAPEO member. The survey was launched in 1993 and is exclusive to NAPEO members. It is a valuable management and benchmarking tool that can guide planning, support strategic initiatives, and inform management teams and trusted advisors about company and industry trends. There is no other set of comparable data either public or private reflective of the PEO industry.

Start-up Guide

By all measures, the PEO industry is thriving. This success has driven significant investment and increasing sophistication in the industry. The technology needs and client expectations for PEOs, HROs, ASOs, and related firms vary greatly. Navigating through the vast array of available technology products and services is increasingly challenging. To compete in this marketplace, these companies need to be able to quickly adapt to serve increasing client expectations when it comes to technology. The pace of change has become daunting for many operators who have grown their businesses by focusing on loyal client relationships and building a strong team of professionals. Vendors and consultants serving the industry have followed the success and are offering targeted solutions to meet the needs of the industry. Costs can be significant, but the returns are great for those that make the right choices.

Columns

The Inside Word

Recently in Texas, we have had great success, both in growing the PEO footprint and in the legislative arena. In my mind, the first naturally leads to the second.
I recently contacted the Texas Workforce Commission (TWC) to inquire about our current PEO stats. I learned that both the number of client companies and the number of worksite employees have grown over 20 percent in the past four years. According to the TWC, we now have 20,052 client companies and 257,391 worksite employees in Texas PEO arrangements.

NAPEO Notebook

Like the PEO business, I’m starting to realize there is no “slow” time at NAPEO. It seems like we were just at our Annual Conference & Marketplace in Orlando, but no sooner were we back here than we were in the throes of our Western States Update in mid-October in Las Vegas. October also found us preparing for our November Board of Directors meeting in San Antonio, of which the 2018 budget is a major part. Along the way is the garden variety diet of industry promotion, immigration, the president’s proposal on association health plans, and other adventures. Our new chair, Norman Paul of SWBC PEO, has hit the ground running and is keeping us busy with a host of new initiatives. We had our first call with our new board in October. The first in-person meeting of the new board will be in San Antonio.

Capitol Comment

After years of being focused on the passage of the Small Business Efficiency Act and IRS PEO certification, NAPEO is now engaged on a host of federal issues that could have a direct impact on the PEO industry. NAPEO finds itself working on issues including association health plans, E-Verify, and the definition of joint employer.

Legal Q&A

Q. For the IRS’s Certified PEO (CPEO) program, has anything changed about the 8973 form, which requires client company signatures coming into the relationship? I had heard that only wet signatures were allowed for both the client and the PEO.
A. Yes, there has been a positive change in this regard. The latest news from the IRS is that...

PEOs in the Community

Regis HR Group has partnered with Feeding South Florida to create a corporate citizenship partnership for its clients to help support the local community.
Regis was started on a foundation that each business it serves is as individual as the people it employs. Founded in 2008, Regis strives to offer the most modular, flexible solutions in the PEO industry to fit each business’ goal. Because we saw a need for employee engagement, Regis added corporate citizenship to its standard client offerings.

PEO Spotlight

This September, the South Florida Business Journal honored 15 of Miami-Dade, Broward, and Palm Beach counties’ top chief executive officers for their business acumen, leadership skills, and community involvement at the Ultimate CEO Awards gala. One of the award recipients was Mark Perlberg, president and CEO of Oasis Outsourcing, based in West Palm Beach, Florida, and a former NAPEO chair.
Mark took the helm of Oasis in 2003 and considers this honor a sign that his company continues to head in the right direction.
“Well, it’s very humbling and it means to me that Oasis has been successful,” Mark said. “It makes me proud and happy to be working with such a great group of people that enabled us to be recognized in that way.”

The Big Picture

The U.S. economy grew at a rate of 3 percent last quarter, the fastest pace in more than two years and a welcome sign of momentum following a sluggish recovery. What do we need to do to ensure this progress continues? For one thing, we need to listen to America’s small and midsize business leaders. These economic playmakers often get drowned out in our modern political discourse, but the U.S. Chamber of Commerce is working to make sure their voices are heard—because our country depends on them.